Yoshiharu (US:YOSH)2024-08-19 12:25Financial Performance - Total revenue for the six months ended June 30, 2024, was $6,137,005, representing a 30.8% increase from $4,689,043 in the same period of 2023[9] - Net loss for the six months ended June 30, 2024, was $1,981,021, compared to a net loss of $2,164,018 for the same period in 2023, indicating an improvement of 8.4%[9] - Restaurant operating expenses totaled $5,689,772 for the six months ended June 30, 2024, up from $4,324,835 in 2023, reflecting a 31.6% increase[9] - The company reported a net operating restaurant income of $447,233 for the six months ended June 30, 2024, compared to $364,208 in 2023, marking a 22.8% increase[9] - Basic and diluted loss per share for the six months ended June 30, 2024, was $(1.48), an improvement from $(1.77) in the same period of 2023[9] - For the six months ended June 30, 2024, net cash provided by operating activities was $621,458, a significant improvement compared to a net cash used of $(2,548,260) in the same period of 2023[11] Growth Strategy - The company aims to achieve over 100% annual unit growth rate over the next three to five years, indicating a strong growth strategy[4] - The company plans to enhance brand awareness and drive high profitability as part of its future operations strategy[4] - The company is focused on expanding in existing and new markets while maintaining comparable restaurant sales growth[5] - Risks include challenges in identifying appropriate restaurant locations and maintaining comparable restaurant sales growth, which could impact future performance[5] - The company has incurred operating losses and may not be profitable in the future, highlighting the need for effective management of growth strategies[5] Assets and Liabilities - Total liabilities and stockholders' equity increased to $17,130,425 as of June 30, 2024, from $13,019,364 as of December 31, 2023[9] - Cash and cash equivalents at the end of the period on June 30, 2024, were $1,194,174, down from $2,980,102 at the end of June 30, 2023[11] - The total stockholders' equity as of June 30, 2024, was $736,607, a decrease from $1,841,423 as of March 31, 2024[10] - Total property and equipment increased to $7,285,673 as of June 30, 2024, from $5,788,962 as of December 31, 2023, representing a growth of approximately 25.8%[37] - Total other assets decreased to $914,424 as of June 30, 2024, from $1,931,357 as of December 31, 2023, indicating a decline of approximately 52.7%[38] Financing Activities - The company raised $64,149 from the sale of common shares during the financing activities for the six months ended June 30, 2024[11] - The Company raised approximately $10.3 million in net proceeds from its initial public offering (IPO) in September 2022, selling 2,940,000 shares at a price of $4.00 per share[17] - The Company executed a reverse stock split of its Class A and Class B common stock at a ratio of 1-for-10, effective November 27, 2023, resulting in 1,230,246 shares of Class A common stock outstanding as of December 31, 2023[15][16] - The Company has entered into a Securities Purchase Agreement allowing the sale of up to $5,000,000 in Class A common stock, subject to certain conditions[85] Acquisitions - The company incurred total cash outflows from investing activities of $(2,198,641) for the six months ended June 30, 2024, primarily due to the acquisition of LV entities for $(1,800,000)[11] - The Company acquired assets from three restaurant entities for a total of $3.6 million, which included $1.8 million in cash, a $600,000 promissory note, and a $1.2 million convertible note[19] - The purchase price allocation for the acquisition included $1,098,070 for fixed assets, $1,409,288 for operating lease right-of-use assets, and $1,985,645 for goodwill[33] Tax and Compliance - The Company reported a total income tax expense of $21,838 for the six months ended June 30, 2024, compared to $6,988 for the same period in 2023[70] - The effective tax rate for the company was 0.00% for the six months ended June 30, 2024, consistent with the previous year[71] - The Company reported no unrecognized tax benefits as of June 30, 2024, indicating compliance with tax regulations[28] - As of June 30, 2024, the Company had cumulative net operating loss carryforwards for federal tax purposes of approximately $8,830,000[75] - The Company recorded total deferred tax assets of $1,854,000 as of June 30, 2024, compared to $1,438,000 as of December 31, 2023[74] Operating Expenses - Operating lease expense for the six months ended June 30, 2024, was $591,643, an increase from $457,959 in the same period of 2023[78] - Marketing costs for the six months ended June 30, 2024, were approximately $59,000, compared to $53,000 for the same period in 2023, reflecting an increase of about 11.3%[22] - The company reported depreciation and amortization expenses of $363,603 for the six months ended June 30, 2024, compared to $251,687 for the same period in 2023[11] Loans and Credit - The company has a $1,000,000 bank line of credit with a fixed interest rate of 5.50% per annum, expiring in December 2024, with an outstanding balance of $1,000,000 as of both June 30, 2024, and December 31, 2023[39] - Total bank notes payables increased to $2,954,493 as of June 30, 2024, compared to $1,406,329 as of December 31, 2023, reflecting an increase of approximately 109.5%[40] - The company has future minimum payments totaling $2,954,493 as of June 30, 2024, with the largest payment of $814,591 due in 2025[41] - The company has a related party loan balance of $1,157,800 as of June 30, 2024, compared to $24,176 on December 31, 2023[64] Subsequent Events - The company did not have any material recognizable subsequent events required to be disclosed as of June 30, 2024[90]